China Fraud Basket Update

While the rest of the world finally wakes up to the reality of pervasive Chinese reverse merger fraud, a topic we discussed way back in November and alleged that soon enough the bulk of Chinese companies receiving NYSE and Nasdaq listing are very possibly frauds, we would simply like to demonstrate the performance of our short Chinese basket discussed most recently here. At a 75% annualized profit, shorting Chinese fraud is proving to be two times as lucrative as being long silver.

Youre looking for equities to go long on here? No problem- Just wait for Robotrader posts, he always finds some retail towel store or leotard monger that has a boner chart to go long on. Of course its always a different 'basket' of boners every day so buyer beware.

I don't know what you have in that basket, but the borrow on some of those names is upwards of 50%!!!! CCME which has been halted was trading borrow at 70% prior to the halt. You could have priced that borrow rate from the options.

Thank you Duncan Niederauer. I can see why shareholders are rewarding you while you sell the fucking floor of the NYSE to the Germans. Nice work if you can get it. Another fuckwad steps fully into the light on the Wall Street and demands applause.

But enough about that...someone quick start another conversation about Lulu Lemon!

ive been buying these companies like mad. The same people that said the market would never recover in march 2009 are saying the same about these hidden gems. Buy of a lifetime. Of course when these stocks triple ZH wont run an article saying they were wrong (ZH is never wrong of course)

you've got to adjust this for the cost of borrow, like phil says above. your 40% return quickly gets eroded with borrowing cost. that's IF you can even borrow the shares. fraud, no doubt...skeptical of china, count me in. but your returns are misleading and assume that you could execute a short based on a bloomberg chart. this is certainly not the case.

that's not what options are for, and the pricing is the same if you do it with an option (that's how somebody would price the lending rate). if you want to use options, then you should at least approximate covering the bid/ask spread on the vol curve and 3m+ of option premium. the returns are materially different, making this misleading. a good trade, no doubt...but the returns imply that you can execute based on a bloomberg chart which simply isn't true.